The Agency for Regulation and Development of the Financial Market of the Republic of Kazakhstan presented draft laws to the Mazhilis that would update the banking framework and create conditions to develop Islamic finance, including by allowing universal banks to carry out Islamic banking operations through “Islamic windows” under their existing licences. The proposal responds to the current regime, under which Islamic banking is permitted only through establishing a standalone Islamic bank. Kazakhstan currently has two Islamic banks (Abu Dhabi Commercial Bank and Zaman Bank), with a combined share of less than 0.5% of banking system assets and the loan portfolio. Under the “Islamic windows” model referenced as widely used in jurisdictions including the United Arab Emirates, Malaysia, Pakistan, Bahrain, Kuwait, Qatar and Indonesia, banks could offer Islamic products via dedicated internal units, subject to organisational segregation of Islamic activities, separate accounting and management of assets and liabilities, dedicated staff, and a Sharia compliance council responsible for product approval and audits. The draft banking law also covers broader themes including technological change, strengthening the banking sector’s role in financing the economy, increasing competition and attracting new entrants, promoting financial technologies, and liberalising the circulation of digital assets. The bills were prepared in the context of implementing the President’s 2024 and 2025 Addresses and have been submitted for parliamentary consideration.

Original source View in tracker